The Securities and Exchange Commission’s (“Commission”) National Exam Program (“NEP”) has identified the master/sub-account trading model as a vehicle that could be used to further violations of the federal securities laws as well as other laws and regulations. In particular, misuse of the account structure raises significant regulatory concerns with respect to: (i) money laundering, (ii) insider trading, (iii) market manipulation, (iv) account intrusions, (v) information security, (vi) unregistered broker-dealer activity, and (vii) and excessive leverage (e.g., inadequate minimum equity for pattern day traders)

To read this article, you need to sign in.

You should only be asked to sign in once. Not the case? Click here

New to Regulatory Compliance Watch?

Register now to read this article and more for free.